ExxonMobil Oil Corporation has executed a sale and purchase agreement (SPA) with Nipco Plc to sell its majority equity stake of 60 per cent in Mobil Oil Nigeria (MON) Plc to Nipco Plc, an indigenous oil and gas company.
Mobil Oil Nigeria and Nipco confirmed the agreement yesterday. Mobil Oil Nigeria, which is required as a quoted company to make such disclosure, filed the notification of the divestment at the Nigerian Stock Exchange (NSE) yesterday.
Under the deal, ExxonMobil Oil Corporation will sell its majority equity stake of 60 per cent to Nipco Investments Limited, a wholly-owned subsidiary of Nipco Plc. The deal is still subject to regulatory approvals. However, such divestment deals, including sales by Oando of its downstream assets, have received clearance from the regulators.
While all the parties were silent on the details of the SPA, The Nation’s check indicated that ExxonMobil will transfer 16.357 million ordinary shares of 50 kobo each to Nipco. The current market value of the 60 per cent equity stake is N40.24 billion. Mobil Oil Nigeria is valued at N67.07 billion at the NSE, with its total issued shares of 360.6 million ordinary shares of 50 kobo each closing yesterday at N186 per share.
Formerly known as IPMAN Petroleum Marketing Company Limited (IPMCL), Nipco was incorporated by members of the Independent Marketers Association of Nigeria (IPMAN) on January 8, 2001 as a private limited liability company to participate in the distribution of white petroleum products business in Nigeria.
Managing director, Nipco Plc, Mr. Venkataraman Venkatapathy, said the SPA marks the beginning of a six-month transition period for the effective takeover of the downstream oil giant.
He said the parties have initiated the process of obtaining regulatory approvals from the Securities and Exchange Commission (SEC) and NSE adding that the transition period will also enable Nipco to effectively manage a smooth and successful completion of the transaction.
“Nipco, considers this acquisition an important synergy. It is part of our strategic move to support Nipco’s continuous growth and expansion of its Nigerian retail footprint. We are confident of adding tremendous value to MON and likewise MON will add a huge value to Nipco. In furtherance of this value addition, Nipco will continue to maintain the Mobil brand on its retail outlets as well as continue to blend and sell the Mobil brand of lubricants under Branding Licence(s) from ExxonMobil,” Venkatapathy said.
According to him, Nipco would justify the confidence repose in it by ExxonMobil for selecting it as the preferred bidder for the acquisition of MON and Nipco will continue to ensure full brand compliance with ExxonMobil’s global standards as well as rigorously sustain and follow ExxonMobil’s code of conduct, ethos and operational excellence.
“MON will continue to run as a separate, distinct and independent company ,from Nipco Plc .Each with its own chief executive officer .Each chief executive officer will report to its board of directors,” Venkatapathy stated .
According to him, in addition to giving the employees much needed assurances on their job safety, Nipco’s goal is to increase presence and efficiency by expanding MON’s retail footprint to a minimum of 300 by December 2017 and make it a vibrant one.
Venkatapathy noted that Nipco’s expansion trend reinforces its implicit confidence in Nigeria’s future pointing out that the Nigerian economy still provides a robust and premium return on investment and Nipco is privileged to have been given this opportunity by ExxonMobil on its home ground.
“To our shareholders and stakeholders, we say welcome to a new dawn. A new era that will usher in stability, prosperity, sustainability and growth,” Venkatapathy assured.
Mobil Oil Nigeria was incorporated as a private limited liability company in 1951 and converted to a public limited liability company in 1978. Its shares were listed on the Nigerian Stock Exchange (NSE) in 1979. Mobil Oil Nigeria is a subsidiary of Mobil Oil Corporation of the United States of America, which holds 60 per cent equity stake.
